Pepsi's Burma withdrawal could spar

Reply-To: "W. Kesavatana-Dohrs" <dohrs@xxxxxxxxxxxxxxxx>
Subject: Pepsi's Burma withdrawal could spark more pullouts
BANGKOK, Jan 29 (Reuter) - Pepsi's complete withdrawal from
Burma could spark further pullouts by other multinationals doing
business in the military-ruled country as companies bow to
growing shareholder pressure, analysts said on Wednesday.
PepsiCo Inc, which last year sold its 40 percent stake in a
Burmese venture after growing pressure from human rights groups,
on Tuesday said it had severed the last of its ties with Burma.
The U.S. soft drinks giant said said it had ended an
agreement to sell syrup to its former franchise bottler in
Rangoon.
Human rights activists have been lobbying for years, through
a consumer boycott campaign, to convince Pepsi to withdraw from
Burma, citing human rights abuses by the military government,
which took power in 1988 after violently suppressing nationwide
pro-democracy protests.
Opposition leader and Nobel Peace laureate Aung San Suu Kyi
has also repeatedly urged foreign businesses not to invest in
Burma until the situation improved.
``This is the biggest company yet to pull out, and it is
clearly because of the grass roots campaign,'' said Simon
Billenness, senior analyst at Franklin Research and Development
in Boston.
Several major companies, including Liz Claiborne, Spiegel
Inc unit Eddie Bauer and beermakers Heineken NV and Carlsberg
have pulled out of investments or stopped sourcing products in
Burma since last year.
``Pepsi's withdrawal isolates other U.S. companies there.
It's sort of a wake-up sign to other companies,'' said
Billenness, whose investment firm is active in various human
rights issues.
Peter Brimble, president of the Brooker Group, a Bangkok
consulting firm that advises on investment in Burma, said the
impact would most likely be felt by companies who must answer to
shareholders.
``Shareholders have an impact on companies. If shareholders
are up in arms about the situation in Burma the company has to
do something,'' he said. ``Private investment firms with no
shareholders can look at it differently.''
Activists plan next to target major oil companies, such as
Unocal, Total, Atlantic Richfield Co (ARCO) and Texaco -- which
are trying to exploit Burma's plentiful oil and gas reserves.
``The next focus is certainly the oil companies,'' said
Larry Dohrs, spokesman for the Free Burma Coalition, which has
headed the campaign to stop investment in Burma.
Human rights organisations have already put strong pressure
on Total and Unocal, which are building a pipeline to move
natural gas from the Andaman Sea to Thailand, citing human
rights abuses around the pipeline area.
Texaco plans to start commercial production of natural gas
off Burma in 1999, along with Nippon Oil Co Ltd and Britain's
Premier Oil Plc. ARCO has a production-sharing contract to drill
on an offshore block in the Bay of Bengal.
Texaco shareholders last year defeated a proposal to end
Texaco's operations in Burma.
The firms most likely to be impacted by boycotts or
shareholder pressure are from Europe and North America, analysts
said, because Asian firms were still keen to invest in Burma.
Diplomats and local analysts said they see a good deal of
interest from South Korean and Japanese investors with trade
missions making frequent trips to Rangoon.
But some of them might be affected by the growing number of
selective purchasing laws in the United States, Billenness said.
So far, 11 U.S. cities, one county and the state of
Massachusetts have passed the laws which bar government agencies
from buying from companies that do business in Burma and the
laws are expected to spread to Europe and Canada this year,
Dohrs said.